In January 2020, the Global Legal Entity Identifier Foundation (GLEIF) published the latest quarterly report, which highlights key developments relevant to the adoption of the Legal Entity Identifier (LEI). Specifically, the reports assess annual growth and renewal expectations, evaluate the level of competition between LEI issuing organizations operating in the Global LEI System and analyze LEI renewal rates and reference data corroboration. Since July 2017, we also deliver statistics on direct and ultimate parent information provided by legal entities.
The Global LEI System Business Report, which was published in January 2020, analyses developments observed in the fourth quarter of 2019. It shows:
At the end of the fourth quarter of 2019, the total LEI population was around 1.5 million. Over 60,000 LEIs were issued during this quarter, compared to approximately 41,000 in the previous quarter. This represents a quarterly growth rate of 4.2% (previous quarter: 2.9%).
In the fourth quarter, China featured the highest quarterly LEI growth rate at a jurisdiction level (122.5%) followed by Turkey (13.9%), India (10.2%), Mauritius (9.8%) and Estonia (9.1%). Growth in China and India can primarily be attributed to regulatory initiatives mandating the use of the LEI. The growth in Turkey is driven by the ISIN-LEI mapping project, which mandates the use of the LEI among all issuers. In Estonia, growth may be attributed to the country-wide promotion of a digital society campaign and recent local market activity.
The report identifies the least and most competitive markets of those with more than 1,000 LEIs, based on the number of LEI issuers providing services in the jurisdiction. In the fourth quarter of 2019, the Netherlands, Italy, China, Spain, and Finland were the five least competitive markets in descending order. The five most competitive, also in descending order, were Lithuania, Romania, Portugal, Latvia and Malta. It is worth noting that the five least competitive markets are jurisdictions with local governmental authorities acting as LEI Issuers, indicating that legal entities seem to have a strong preference to working with these local operating units (LOUs).
In the fourth quarter of 2019, many markets exhibited increasing competition among LEI Issuers. In particular, the United States, Australia and the Scandinavian countries (Sweden, Norway and Denmark) have shown more relatively equal market shares among the LOUs operating in these jurisdictions.
The annual renewal process ensures that the legal entity and the LEI issuing organization review and re-validate the legal entity reference data at least once per year. The Global LEI System is unique in providing absolute transparency on the timeframe when data was last verified.
In the fourth quarter of 2019, the overall renewal rate of 66.7% was lower than the previous quarter (70%). At the end of the quarter, 69.2% of all LEIs were in good standing (last quarter: 72.1%).
The renewal rate in the EU dropped to 67.3% (previous quarter 71.2%). In non-EU jurisdictions, it was also lower at 58% (previous quarter: 59.8%). In the reporting period, the five jurisdictions which demonstrated the highest renewal rates were Japan (91.3%), Finland (90.5%), Liechtenstein (87.1%), India (83.5%), and Norway (79.8%). Brazil (56.8%), the United States (55.4%), the United Kingdom (54.2%), the Russian Federation (49.1%) and Canada (47%) had the highest non-renewal rates.
The business card information available with the LEI reference data, e.g. the official name of a legal entity and its registered address, is referred to as ‘Level 1’ data. It defines ‘who is who’. The Level 1 data is considered fully corroborated if, based on the validation procedures in use by the LEI issuer, there is sufficient information contained in authoritative public sources to corroborate the information provided by the legal entity for the record. If this is not the case, or the legal entity is not required to file with a local register (e.g. fund or trust), the business card information available with an LEI record is classified as ‘entity-supplied only’.
In the fourth quarter of 2019, the percentage of fully corroborated Level 1 reference data within the entire LEI population increased slightly to 80.6% from 80.1% in the previous quarter.
In the fourth quarter of 2019, approximately 1.29 million LEI registrants representing 90% of the total LEI population had reported information on direct and ultimate parents. 99.9% of LEI registrants who obtained a newly issued LEI or renewed an existing LEI in this quarter reported parent information.
The quarterly reports refer to concepts and definitions unique to the Global LEI System. To facilitate an easy understanding of the reports, we have summarized relevant concepts in the document ‘Background Information on Global LEI System Business Report’.
GLEIF also makes available the ‘Business Reporting Dictionary’, which defines formulas and algorithms used to report on the LEI activity highlighted with the quarterly reports.